What does the "beta" of an asset measure?
A)how the nondiversifiable risk compares with diversifiable risk for an asset
B)how the expected return compares with the diversifiable risk of a given asset
C)how the expected return compares with the nondiversifiable risk of the market portfolio
D)how the nondiversifiable risk of a given asset compares with that of the market portfolio

Question

Quizplus · Accepted Answer

Beta measures the nondiversifiable risk (systematic risk) of an asset in comparison to the market portfolio, indicating how much the asset's returns are expected to move relative to market returns.

What Does the "Beta" of an Asset Measure